If Apple allowed 3rd party developers to build their own purchasing stores. It allows nefarious software developers free reign to cause mischief and grief.

To avoid all of that its better for Apple to handle the money transaction.

That's a myth. There are mischievous apps that phish for your information and sneak unwarranted features on your device, like a game that farms your entire contacts database or a flashlight app that enables tethering. The idea that trusting Apple to vet the app doesn't guarantee security in the slightest. Wasn't there an iTunes account breech a few months ago?

Quote:

Originally Posted by TenoBell

This is completely false.

If you purchase your book directly from Amazon, Apple does not get the 30%.

Correct. But now you must make that same book directly available in the app store (probably for the same price, since the language is vague), in which case Apple does get 30%. They don't manage the transactions, they don't serve up the content, yet they're going to charge 10x what a typical POS system does for the exact same content.

Quote:

Originally Posted by xsu

So now providing the choice of using a payment method is equivalent to REQUIRING you to use it? If you feel so strongly about not giving Apple 30%, then just choose to use the outof-app payment method when facing the choice.

And you said it yourself Apple's App store is the platform that everyone turns to. But they should just provide it for free? That businesses that benefit from apple's platform shouldn't pay for using that platform?

Your logic, or lack thereof, is astounding.

Apple doesn't provide it for free. You have to pay to enter the developer program and tune your app to comply with Apple's strict, and ever-changing, policies. Had this been the case since the app store's inception, I could follow your argument, but a *major* change like this can dramatically change or even destroy business that are currently relying on Apple's hardware who otherwise have been playing by the rules for years.

If Amazon has to suddenly make every kindle book they sell available for purchase on iOS, that requires renegotiation with every content provider, since the agreements they had before were only involving splitting money with Amazon. If publishers don't want to go along, suddenly the app you're running on your device today could stop functioning all together, and that vast library of books that you've been purchasing for years on Kindle becomes useless if your only used iOS devices.

This hurts consumers and publishers. Again, if Apple had planned it this way from the start, the tone of the conversation might be different. But to me, this is classic bait and switch. Exploit your developers to create amazing services and content on your platform, and then when it hits big, start forcing yourself into the equation and start taking your cut.

Apples locked platform allows for free apps to be attained through their system. With this choice they have opened themselves up for funding the bandwidth to supply these pieces of software, including those who make money for the programmers -outside of- apples channel (advertising, out of app purchasing).

Saying apple is ok taking 30% of revenues forever, to fund the initial deployment of the free app is taking the piss. If apple doesnt like it, remove the free applications from the app store. Otherwise they are costing apple money.

The app store on the iPad is creating tens of millions of Kindle sales for Amazon.

How much is that worth to Amazon?

a) Zero?
b) Nothing.
c) Not a penny
d) A tidy sum

I'd argue that Apple is certainly entitled to something. And of course, having control of the platform means that Apple is entitled to demand it.

Is Apple entitled to 30% of the retail value?
Nope. No way. That would be unsustainable. It would leave Apple making more money from a sale than Amazon.

But who said anything about 30%?

This, ladies and gentlemen, is called a negotiating position.

It's not about yay, or nay. It's about how much.

C.

Precisely. Unlike application sales, in-app purchases are essentially POS transactions. You are responsible for tracking the purchases and serve and maintain your own delivery systems (servers, bandwidth, etc). Apple has *nothing* to do with in-app sales other than the transaction itself.

The idea that Apple can get away charging 10x what a typical POS system does is laughable at best, especially when they have zero to do with the actual service that runs on their device THAT THEY WERE PERFECTLY CONTENT WITH ALLOWING BEFORE. (I hate typing in caps, btw xD)

Quote:

Originally Posted by cycomiko

Apples locked platform allows for free apps to be attained through their system. With this choice they have opened themselves up for funding the bandwidth to supply these pieces of software, including those who make money for the programmers -outside of- apples channel (advertising, out of app purchasing).

Saying apple is ok taking 30% of revenues forever, to fund the initial deployment of the free app is taking the piss. If apple doesnt like it, remove the free applications from the app store. Otherwise they are costing apple money.

Apple should have never allowed it from the beginning, then. The part that angers me the most is Apple was perfectly fine allowing this to go on while iOS and the App Store was growing. This change is a classic bait-and-switch. Developers who were following the rules and playing nice with Apple are now suddenly supposed to pay more, which in some cases, could completely destroy a business.

I just don't think that it costs them that much for Amazon's app alone. For everyone's apps yes, we are talking millions upon millions of dollars, but not just Amazon alone. If they were delivering the actual content (in this case the ebooks themselves) that would be different, but that's not the case as far as I can tell.

There is no way that the process of distributing the Kindle app costs Apple as much as 30% of every book that is sold in the Kindle store through iOS, unless the books themselves were being directly distributed through Apple's channels. Which raises a valid question to which I don't know the answer: if Amazon sells books in the app itself, is the content delivered through Amazon or Apple?

Amazon shouldn't have to foot the bill for all of the devs that are selling cheap/free apps.

Apple didn't just hang a sign on the Internet one day that said app store. They had to design phones and tablets that stood out. And boy did they do that. Now they are charging third parties for access to their customers. The determination of what amazon has to foot the bill for is a product of what they are able to negotiate not some calculation you make as to what it costs apple to to host amazons app. I use the word negotiate but in this case apple has a standard policy-30%.

Apple didn't just hang a sign on the Internet one day that said app store. They had to design phones and tablets that stood out. And boy did they do that. Now they are charging third parties for access to their customers. The determination of what amazon has to foot the bill for is a product of what they are able to negotiate not some calculation you make as to what it costs apple to to host amazons app. I use the word negotiate but in this case apple has a standard policy-30%.

That's a myth. There are mischievous apps that phish for your information and sneak unwarranted features on your device, like a game that farms your entire contacts database or a flashlight app that enables tethering. The idea that trusting Apple to vet the app doesn't guarantee security in the slightest. Wasn't there an iTunes account breech a few months ago?

Its a myth because it cannot happen.

No the alert of the breach itself was a phishing scam.

Quote:

Correct. But now you must make that same book directly available in the app store (probably for the same price, since the language is vague), in which case Apple does get 30%. They don't manage the transactions, they don't serve up the content, yet they're going to charge 10x what a typical POS system does for the exact same content.

How does Apple get 30% if Amazon is selling the same book for the same price and Apple gets none of the money?

I have no clue of how you came up the 10X figure. Seeing as books on Kindle are typically $3-$5.

Quote:

Apple doesn't provide it for free. You have to pay to enter the developer program and tune your app to comply with Apple's strict, and ever-changing, policies.

You really think that $99 developer fee really covers the costs of doing any of this?

Its simply a barrier to keep some of the riff raff out.

Quote:

If Amazon has to suddenly make every kindle book they sell available for purchase on iOS, that requires renegotiation with every content provider, since the agreements they had before were only involving splitting money with Amazon.

No they don't the 30% comes out of Amazon's end. The publisher isn't involved in that.

Apple is hosting the Sony app. It costs Apple money to have the Sony Reader app on their store.

The reason Apple hosts free apps is because it makes their hardware more attractive. A lot of people buy an iPad and not a Kindle because the iPad can also be a Kindle. Apple shouldn't drive away third party content, which helps it sell devices.

First, Amazon would not allow Apple to sell its competing services (e.g. digital books or digital music) through their store. Second, if Amazon demanded their standard cut in such a scenario, it would make it unprofitable for Apple to do so (and they wouldn't). When you're dealing with third-party content which you are already selling at a personal cut you have to completely remake your business model in order to participate in another layer (i.e. a third party selling a third-party's content through another party's service). Margins in digital music and digital books don't allow for this with these kind of cuts.

Let's get this straight, Amazon wouldn't sell anything from competitor's store, Apple does while charging a fee. And you find problem with what Apple is doing?

Whether Amazon can make it profitable doing business on Apple's store is NOT Apple's concern. Just like it's not really the mall owner's duty to let you setup your shop for free because otherwise your business can't turn a profit.

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Anyway, back to your point. The disgrace here is that this that any strategic value behind a move like this would have to be great to warrant making a decision which is terrible for so many Apple customers. The only way I can even begin to wrap my head around why Apple would be consider this is if this was a huge hangup in negotiation for magazine subscriptions. Aside from this, it diminishes the value of the platform to users, comes across as anti-competitive while generating bad PR, and doesn't really bring in a worthwhile revenue increase (relative to their currently existing coffers). Normally a company would make special arrangements in cases like this to come up with a solution which is viable to both parties.

What would really maximize value for Apple's users is for Amazon and the like to offer their books for free. Then they don't have to pay Apple 30%, and you get whatever you want. It would probably kill Apple's iBook if it still charge money for books. Users would be real happy, and Apple's platform should be real popular then, wouldn't it? So why aren't you crying to Amazon/Sony asking when free books are coming?

So unless Kindle changes to allow in-app purchases it is in danger then?

Seems ridiculous - like others have mentioned akin to paying a cut to your car manufacturer when you top up its fuel or to your TV manufacturer when you watch a DVD.

This is more akin to the commonplace slotting fees paid by manufacturers to retailers for (premium) shelf space. Apple wants a shot at being compensated for providing the shopping venue as well as recovering their costs for providing infrastructure.

Apple should have never allowed it from the beginning, then. The part that angers me the most is Apple was perfectly fine allowing this to go on while iOS and the App Store was growing. This change is a classic bait-and-switch. Developers who were following the rules and playing nice with Apple are now suddenly supposed to pay more, which in some cases, could completely destroy a business.

Apple have built a empire working closely with content creators, and providing them with platforms to profitably sell their content.

But it has to be profitable for both parties.

I suspect something has happened which demands a slightly more forthright negotiating tactic.

If they are using apple to get customers then apple should get a cut. Otherwise they are free to develop their own app store and charge what they want.

You're missing the point. When you buy a kindle book, you're not Apple's customer, you're Amazon's. Imagine buying an iPad, knowing how wonderful it is that you can buy your books through Amazon's vast library and enjoy reading them on your device, and suddenly that application changes dramatically so that only select books that have been authorized to use Apple's in-app purchase can be allowed, you might find you are now unable to read most of your library. Or worse, what if Apple demanded all or nothing, and suddenly the Kindle application disappeared. You would be upset, no?

That's the type of situation we could find ourselves in if we take this statement from Apple at face value.

The original report was based on comments from Sony, which said its ebook Reader app had failed to pass Apple's approval process because its in-app sales weren't going through Apple.

Writing for the New York Times, Claire Cain Miller and Miguel Helft wrote the Apple is "further tightening its control of the App Store," and then speculated that this might spell the last days for similar apps, including Amazon's Kindle ebook title, which like Sony Reader, competes against Apple's own iBook app.

However, Wall Street Journal blogger John Paczkowski has reported official comment from Apple spokesperson Trudy Miller, who said the company has not "changed our developer terms or guidelines," while noting that "we are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase."

That would be the reverse of the situation reported by the Times, and also makes more sense. Pulling popular titles such as Kindle, and similar content-access apps including Dropbox, Hulu+, Netflix and Pandora, would do little to benefit Apple.

In-app option required, but not exclusive

Instead, as Paczkowski explained, "Apple wants its cut on sales enabled by its iOS devices, it has an established guideline that allows it to take it and thats what its doing.

"Developers are still free to send customers to their own Web stores, but they must also offer them the option of purchasing content within their apps themselves, and they must route those sales through Apple which will then take its percentage."

The U.S. Department of Justice is watching for any ANTITRUST violations from Apple.

Freedom of choice is important to create competition between sellers and lower prices for consumers.

It's great to know that the U.S. Department of Justice is watching so that we can get better prices when we buy from Apple.

Leave it up to Dilger to spin this in an innocent way. Requiring in-store iOS purchases as an option in, say, the Kindle app, would wreck Amazon's profit margin on books and would either require that they charge higher prices for in-app purchases (hard to see that innocently) or that they pull out from iOS.

As you point out, they are free to not participate on the iOS platform. I am sure that would cause some hurt for Apple.

I have no problem with Apple demanding a shot at the sale based on their promotion of the product. I do think that the numbers will need to be reworked for this kind of in-app sales.

Would you really give up your iPad, iPhone, or iPod touch if you didn't have access to content purchased elsewhere? Probably not.

Oh most definitely I would as would many many others.

An even bigger consideration are those who do not yet own any IOS devices.
This has been a big deciding factor in my next tablet purchase.
The more Apple closes itself off and makes it difficult for the end user to actually use their devices the fewer end users they will have.

This is why I have a Roku box instead of an Apple TV.
This is why I prefer Kindle to iPad.
This is why my next cell phone purchase will most likely be Android based.

Granted I`ll be missing out on Apples excellent, elegant craftsmanship but my devices will actually do what I need them to do without costing me an arm and a leg.

Let's get this straight, Amazon wouldn't sell anything from competitor's store, Apple does while charging a fee. And you find problem with what Apple is doing?

Whether Amazon can make it profitable doing business on Apple's store is NOT Apple's concern. Just like it's not really the mall owner's duty to let you setup your shop for free because otherwise your business can't turn a profit.

Endeavor to think the different circumstances through rather than treating these two companies as equal in all regards. Not only does this make questionable business sense for Apple (I'll assume for the time being that they have a damn good reason for this, or that there's some misunderstanding, because this is both uncharacteristic and Apple knows damn well what it is doing most of the time) it also diminishes the appeal of their platform and reduces the functionality of their devices for us, the users. It would be an especially unsavory blow to people who replaced their Kindles with an iPad, for example.

Apple has a right to do this. I don't think many here are contesting that. But it would represent a downright shitty thing to do to their customers. I adore this company, but when they're doing something which sucks for me it is my pleasure to express my disagreement.

Quote:

Originally Posted by xsu

What would really maximize value for Apple's users is for Amazon and the like to offer their books for free. Then they don't have to pay Apple 30%, and you get whatever you want. It would probably kill Apple's iBook if it still charge money for books. Users would be real happy, and Apple's platform should be real popular then, wouldn't it? So why aren't you crying to Amazon/Sony asking when free books are coming?

Are you trying to be offensive? This did succeed in being insolent and immature.

Quote:

Originally Posted by penchanted

As you point out, they are free to not participate on the iOS platform. I am sure that would cause some hurt for Apple.

I have no problem with Apple demanding a shot at the sale based on their promotion of the product. I do think that the numbers will need to be reworked for this kind of in-app sales.

Except these business models are presently incompatible.

The true measure of a man is how he treats someone that can do him absolutely no good. Samuel Johnson

You're missing the point. When you buy a kindle book, you're not Apple's customer, you're Amazon's. Imagine buying an iPad, knowing how wonderful it is that you can buy your books through Amazon's vast library and enjoy reading them on your device, and suddenly that application changes dramatically so that only select books that have been authorized to use Apple's in-app purchase can be allowed, you might find you are now unable to read most of your library. Or worse, what if Apple demanded all or nothing, and suddenly the Kindle application disappeared. You would be upset, no?

That's the type of situation we could find ourselves in if we take this statement from Apple at face value.

If you want to post advertisement for your product in a popular place, you pay for that privilage. Google charges advertisers not for product sold, but simply click throughs or even just impressions. Are you crying about it? Do you think the stores you go to through Google Ads aren't passing on the cost to you?

Now Apple isn't even charging for potential customers, but actual customers, using Apple's purchasing platform for that matter. Yet you somehow think Apple is doing something wrong?

Are you trying to be offensive? This did succeed in being insolent and immature.

.

So you believe thinking only in terms of what customers finds useful and appealing is being insolent and immature? Thank you for proving my point. Anybody who think Apple's course of action should be dictated only by what a "user" finds useful or appealing isn't thinking straight.

Nice example, but where does the mall owner get a fixed percentage of all sales made by the retailer? Not sure how 30% is "reasonable and affordable". The "overheads" argument falls flat as 1) the books aren't hosted by Apple and 2) a £13 book should have the same overhead as a £5 book.

Overall, looks like Apple wants to make sure someone doesn't do to them what they did (with the help of iTunes) to Windows. If it wants to become serious about being the provider for books, maybe they'll broaden their selection.

Wow...some people make comments without even knowing what they're talking about.

Some malls charges rent + a percentage of gross receipts. You even have to pay for your own electricity and personnel. And every year, they review your sales and they require that you sales has to increase a certain percentage to keep the store. Otherwise, you're out.

The merchandise the store sells aren't hosted or sourced by the mall owner. But they get a cut to. The retailers has to factor in those cost.

This is usually the case for malls that are in demand with a lot of retailers waiting to get in, which is what the App Store is at the moment.

I'm pretty sure if the App Store isn't as popular as it is now, they would be more lenient in their rules. But such is the way of capitalism is it not?

So you believe thinking only in terms of what customers finds useful and appealing is being insolent and immature? Thank you for proving my point. Anybody who think Apple's course of action should be dictated by what a "user" finds useful or appealing isn't thinking straight.

Do you usually make your points by twisting what a person says into a completely irrational extreme, and then turn around and declare some kind of fictional personal victory when they respond, understandably so, by pointing out how ridiculous your statement was?

Grow up.

The true measure of a man is how he treats someone that can do him absolutely no good. Samuel Johnson

Do you feel its fair for Amazon and B&N to directly profit from the App Store while contributing nothing back to the App Store?

Do you feel it fair that I need to go to Apple's App Store and Apple's App Store ONLY in order to put an app on MY phone in the first place?
Apple should give my a cut then for every time I download an app from them - like airline points.

.... Tell mall owners to give Apple free rent because its retail stores are benefitting the traffic going to their malls! Oh wait, that's not how the world works, is it?

....

Sorry for being off topic everyone, couldn't let it go..

Maybe not Apple, but other box giants, you better believe they get a deal. Happens all the time. Another example...states undercutting other states with specific business tax incentives and subsidies to get employment.

Race to the bottom baby, enjoy your ride!

Hokey religions and ancient weapons are no match for a good blaster by your side, kid.

Do you usually make your points by twisting what a person says into a completely irrational extreme, and then turn around and declare some kind of fictional personal victory when they respond, understandably so, by pointing out how ridiculous your statement was?

Grow up.

Taking an argument and stretching it to the extreme is the perfect method for finding the absurdity in them. Someone argued Apple shouldn't charge the 30% because Amazon might have to leave because it might not afford it, , thus making his iPad less useful or appealing. My counter is if what what he think is useful or appealing is the only concern, he should find it even more useful or appealing if Amazon give out all books for free. Obvisouly you find that position absurd, which is entirely the point.

If you don't believe Amazon should sacrifice its interest for your enjoyment, why should Apple?

Apple have built a empire working closely with content creators, and providing them with platforms to profitably sell their content.

But it has to be profitable for both parties.

I suspect something has happened which demands a slightly fore forthright negotiating tactic.

C.

Something did happen - Amazon last quarter started selling more Kindle books than paperback for the first time ever. Apple isn't able to make the deals with publishers fast enough with their limited, competing iBookstore, so rather than compete, they'll just start taking a cut off Amazon and Sony. Good for Apple, bad for everyone else, including us.

Quote:

Originally Posted by penchanted

This is more akin to the commonplace slotting fees paid by manufacturers to retailers for (premium) shelf space. Apple wants a shot at being compensated for providing the shopping venue as well as recovering their costs for providing infrastructure.

Apple should have thought of that before they allowed developers to develop on their platform. Also, Apple does *NOT* provide the infrastructure for services like Kindle - Amazon does. Apple only provides bandwidth for the application, which obeyed and followed all the rules set by Apple. Now, Apple is changing the rules. Again.

Quote:

Originally Posted by TenoBell

How exactly is Apple going to charge them 30% for their services?

Every in-app purchase gives 30% of the transaction to Apple. If Amazon and Sony have to start providing in-app purchase options to all of their books in order to remain in the App Store, that means Apple starts taking a major chunk of their revenue on any sale that takes place inside the app. Not every transaction, but enough to affect your business.

Quote:

Originally Posted by TenoBell

Its a myth because it cannot happen.

No the alert of the breach itself was a phishing scam.

Dude.... Apple vetting applications doesn't ensure security. That's a fallacy. How many times have you read stories of applications that steal your info or otherwise break app store rules still being approved, but then later removed from the store? Vetting an app doesn't guarantee security. Its better than the wild west, but not perfect. Don't kid yourself.

Quote:

How does Apple get 30% if Amazon is selling the same book for the same price and Apple gets none of the money?

Again, in-app purchases give Apple 30%.

Quote:

I have no clue of how you came up the 10X figure. Seeing as books on Kindle are typically $3-$5.

The 10x figure refers to POS systems, which stand for "Point of Sale." They're the services that handle the transactions you make on your credit or debit card. Typically, these services charge around 3% of your transaction. Apple's in-app purchase does the same thing and charges 30%, hence, 10x the cost just to handle the credit card.

Quote:

You really think that $99 developer fee really covers the costs of doing any of this?

Its simply a barrier to keep some of the riff raff out.

If Apple felt that the $99 fee isn't enough, they shouldn't have come up with that figure in their development program. Apple is a corporation, friend. They're some small startup that's getting exploited and bullied by bigger companies. Apple sets a price, developers sign an agreement with them to follow the rules, and Apple provides the service. Its no more complicated than that.

Quote:

No they don't the 30% comes out of Amazon's end. The publisher isn't involved in that.

The publisher is absolutely involved with that. Amazon is authorized to sell books through their own channel. By allowing in-app purchase, Amazon is now involving Apple through the sale of books. Do you really think publishers are going to allow revenue from the sales of their products go to another company (Apple) without permission? Absolutely not. Take a business course at your local community college and they will teach you about this sort of stuff.

Taking an argument and stretching it to the extreme is the perfect method for finding the absurdity in them.

Viewing life through black and white when it is generally shades of gray is a great way to sustain one's personal ignorance. Generally, when you take something which has little impact on the involved parties, and turn it into something wholly irrational on one side, and unsustainable for the other party, you change its meaning.

Quote:

Originally Posted by xsu

Someone argued Apple shouldn't charge the 30% because Amazon might have to leave because it might not afford it, , thus making his iPad less useful or appealing. My counter is if what what he think is useful or appealing is the only concern, he should find it even more useful or appealing if Amazon give out all books for free. Obvisouly you find that position obsurd, which is entirely the point.

Sorry buddy, but this type of behavior is not the sort of thing consumers should encourage or congratulate. As for the rest see above.

Quote:

Originally Posted by xsu

If you don't believe Amazon should sacrifice its interest for your enjoyment, why should Apple?

As consumers, we purchase products which we think we will offer something to our lives. Changes which impact this perspective amount to the most important matters from a customer's perspective. They are also relevant from the business's perspective as well because it impacts customer loyalty and the way that company is perceived. My personal view on this is clearly shared by many, and this is especially so when it comes to Amazon.